Densan System Holdings Co. Ltd. (4072) AI Stock Analysis

• Market Cap: ¥38.22B
• Dividend Yield: 2.29%
• Average Volume (3M): 291.29K
• Price to Earnings (P/E): 18.7
• Beta (1Y): 0.68
• Revenue Growth: 5.55%
• EPS Growth: 18.43%
• Country: JP
• Employees: 1,005
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 40.47
• Shares Outstanding: 10,798,341
• 10 Day Avg. Volume: 113,110
• 30 Day Avg. Volume: 291,286
• PEG Ratio: -1.97
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 9.83
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥3,890.00 ▲(11.30% Upside)

Densan System Holdings Co. Ltd. demonstrates a strong financial position with a robust balance sheet and steady income growth, contributing significantly to the overall score. The technical analysis suggests a neutral market position with potential for upward momentum. The valuation is reasonable, supported by a fair P/E ratio and a solid dividend yield. However, minor concerns in operational efficiency and cash flow management slightly temper the overall outlook.

Densan System Holdings Co. Ltd. Business Overview & Revenue Model

Company Description

Densan System Holdings Co., Ltd., through its subsidiaries, provides information technology consulting and software development services in Japan. The company provides solutions in the areas of data processing, systems-integration, and software development; IT services and payment acceptance and settlement services. The company was founded in 1967 and is headquartered in Gifu, Japan.

How the Company Makes Money

Densan System Holdings generates revenue through multiple streams, primarily by providing custom software development and system integration services to its clients. The company charges fees for its consulting services, project management, and ongoing support and maintenance of IT systems. Additionally, it earns income from licensing proprietary software products and providing cloud-based solutions. Strategic partnerships with other technology providers and enterprises in various industries enhance its market reach and contribute significantly to its earnings by expanding service offerings and client access.

Densan System Holdings Co. Ltd. Financial Statement Overview

Summary

Densan System Holdings Co. Ltd. shows a solid financial foundation with strong balance sheet metrics and steady income growth. However, there are minor concerns in operational efficiency and cash flow management that the company should address to enhance profitability and liquidity.

Income Statement

Densan System Holdings Co. Ltd. has demonstrated consistent revenue growth with a substantial increase of 3% from 2023 to 2024. The gross profit margin is healthy at 15.2% for 2024, although it has slightly decreased from the previous year. Net profit margin stands at 3.0%, indicating modest profitability. However, there is a decline in EBIT and EBITDA margins compared to the previous year, suggesting some challenges in operational efficiency.

Balance Sheet

The company maintains strong financial stability with a debt-to-equity ratio of 0.05, indicating low leverage. Equity ratio is robust at 35.8%, reflecting a solid capital structure. Return on equity is 8.4%, showcasing efficient use of equity to generate profits. Overall, the balance sheet indicates a financially healthy organization with low risk.

Cash Flow

Operating cash flow is positive, but a decline from the previous year suggests potential cash flow management issues. Free cash flow remains positive with a growth rate of -41.9%, reflecting a decrease in liquidity. The operating cash flow to net income ratio is 1.63, indicating decent conversion of income to cash. Overall, the cash flow position is stable but has room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.28B	61.26B	59.59B	53.48B	50.36B	45.75B
Gross Profit	9.64B	9.29B	10.60B	9.98B	9.23B	8.02B
EBITDA	3.96B	3.21B	4.01B	4.06B	3.84B	3.60B
Net Income	2.02B	1.85B	2.00B	2.35B	1.98B	1.92B
Balance Sheet
Total Assets	76.48B	61.75B	57.05B	72.17B	51.28B	47.98B
Cash, Cash Equivalents and Short-Term Investments	50.81B	19.28B	15.91B	12.53B	13.67B	29.52B
Total Debt	5.60B	1.07B	1.53B	1.49B	1.09B	1.21B
Total Liabilities	53.28B	39.45B	36.28B	52.51B	33.68B	32.15B
Stockholders Equity	22.98B	22.08B	20.58B	19.45B	17.41B	15.65B
Cash Flow
Free Cash Flow	0.00	2.73B	4.69B	1.34B	1.92B	1.87B
Operating Cash Flow	0.00	3.02B	5.51B	1.91B	2.53B	2.76B
Investing Cash Flow	0.00	239.00M	-852.00M	-1.72B	-1.23B	-1.91B
Financing Cash Flow	0.00	-765.00M	-941.00M	-5.00M	-719.00M	2.69B

Densan System Holdings Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3495.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4072, the sentiment is Neutral. The current price of 3495 is below the 20-day moving average (MA) of 3541.00, below the 50-day MA of 3599.00, and above the 200-day MA of 2795.70, indicating a neutral trend. The MACD of 21.54 indicates Positive momentum. The RSI at 48.32 is Neutral, neither overbought nor oversold. The STOCH value of 13.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4072.

Densan System Holdings Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4396	76 Outperform	¥31.14B	21.21	―	1.65%	22.28%	19.79%
9600	75 Outperform	¥38.45B	19.01	―	2.25%	7.50%	-3.67%
3655	73 Outperform	¥45.50B	55.50	―	0.30%	8.64%	-23.23%
9640	73 Outperform	¥30.10B	19.53	―	4.82%	1.27%	26.79%
2349	72 Outperform	¥25.10B	10.57	―	1.26%	9.56%	7.39%
4072	71 Outperform	¥38.22B	18.73	―	2.29%	5.55%	18.43%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%